As NVDA stock drops on Biden’s proposed AI rules, Nvidia flatters Trump in statement blasting ‘government overreach’

With only a week left in office, the Biden administration is still firing off proposed rules, including new restrictions on exports of advanced AI computer chips that could help keep the U.S. ahead of rival nations—China, specifically.

But big industry players don’t appear happy about it. And, in response, they are laying on the flattery for the incoming administration.

A fact sheet released Monday by the White House reads that “to strengthen U.S. security and economic strength, the Biden-Harris Administration today is releasing an Interim Final Rule on Artificial Intelligence Diffusion. It streamlines licensing hurdles for both large and small chip orders, bolsters U.S. AI leadership, and provides clarity to allied and partner nations about how they can benefit from AI. It builds on previous chip controls by thwarting smuggling, closing other loopholes, and raising AI security standards.”

In effect, those rules would put limits on AI chip exports, in an effort to preserve an American advantage in the AI space. Out of all the companies in that space, Nvidia is likely to feel the impact of these proposed rules the most, as it sells roughly nine out of ten AI chips around the world.

Accordingly, the company is firing back. “It makes no sense for the Biden White House to control everyday datacenter computers and technology that is already in gaming PCs worldwide, disguised as an anti-China move,” said Ned Finkle, vice president of government affairs for Nvidia, in a statement provided to Fast Company. “The extreme ‘country cap’ policy will affect mainstream computers in countries around the world, doing nothing to promote national security but rather pushing the world to alternative technologies.”

Additionally, Nvidia is cozying up to the incoming administration, likely in hopes that it will reverse or nix the proposed rules altogether. “The first Trump Administration laid the foundation for America’s current strength and success in AI, fostering an environment where U.S. industry could compete and win on merit without compromising national security,” an Nvidia statement, penned by Finkle and published on Monday, reads. “As the First Trump Administration demonstrated, America wins through innovation, competition and by sharing our technologies with the world—not by retreating behind a wall of government overreach. We look forward to a return to policies that strengthen American leadership, bolster our economy and preserve our competitive edge in AI and beyond.”

As the rhetoric war plays out, Nvidia’s stock is taking a hit. As of 11 a.m. ET Monday, shares were down around 3%, and are down around 11% over the past week.

But others in the industry are also voicing their concerns. A statement from the Semiconductor Industry Association (SIA) echoes Nvidia’s concerns.

“We’re deeply disappointed that a policy shift of this magnitude and impact is being rushed out the door days before a presidential transition and without any meaningful input from industry,” the SIA statement reads. “The new rule risks causing unintended and lasting damage to America’s economy and global competitiveness in semiconductors and AI by ceding strategic markets to our competitors . . . The stakes are high, and the timing is fraught. We stand ready to work with leaders in Washington to chart a path forward that protects national security while allowing us to do what America does best—compete and win globally.”